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Netflix Could Undermine UltraViolet As Low Cost Rentals Trash Studio Profits: Report

Moguls will need a stiff drink nearby when they read Morgan Stanley analyst Benjamin Swinburne’s bracing report today about the state of the home video business — and Hollywood studios. He says that film operations at Universal, Disney, Paramount, Fox, and Warner Bros are worth about $19.3B, down from $40.2B in 2007. And a big reason for the 52% drop is that studios’ annual home video profits from each TV household fell to $100 last year from $127 in 2007 — and will continue to slide to $93 in 2015. Sales and high-priced rentals of DVDs and Blu-ray discs from retailers such as Blockbuster are simply falling too fast as consumers discover that they can do just fine paying $1.20 a night to rent a disc at a kiosk — or less to watch a movie from Netflix. The analyst says it’s possible that studios will boost sales of discs with the UltraViolet initiative, which gives buyers opportunities to stream the movies to mobile and other digital devices. But probably not: Read More »

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‘Harry Potter’ Won’t Be Gone Too Long

Harry Potter fans take heart. Just because Warner Bros says it won’t ship more DVDs or Blu-rays after December 29, that doesn’t mean Hogwarts will immediately vanish from physical or virtual shelves. Or that it won’t be available for streaming, video-on-demand or downloading. “There will be Potter product come the first of the year,” says Jeff Baker, SVP/GM of Warner Bros’ Theatrical Catalog. “Over time, there’ll be less and less of that inventory,” Baker told EW. “At some point, whether it’s next April or May or June or July, it’ll probably be very difficult to find Harry Potter product, especially if you’re looking for the third movie or the fifth movie, for example.” Pulling classics out of circulation, even a big hit like the Potter movies, isn’t uncommon. Disney has been doing it forever with animated classics that are re-issued a few years hence in newer, “enhanced” or digitally remastered versions with more extras. Warner Bros has done it too with catalog titles such as The Wizard Of OzGone With The Wind, and Blade Runner — only to be reintroduced with a big splash. Even Harry Potter: The Complete 8 Film Collection, which hits stores November 11, won’t include “an Ultimate Edition on the final two films,” which means there inevitably will be “some grand kind of piece” Baker says could come at “the end of 2012 or the beginning of ’13.”


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Report: Blu-ray Sales Falling Short Of Expectations Even As Prices Decline

By | Wednesday June 8, 2011 @ 6:26am PDT

A research report this morning from The NPD Group confirms the prevailing narrative that the home video business is in trouble — although you might miss that if you just look at the upbeat headline on its release: “Consumers Still Positive On Blu-ray.” NPD found that 116 million adults bought a DVD or Blu-ray disc in the six months ending in March, down 9.4% from the same period last year. The firm says Hollywood studios are partly to blame. They released weaker titles in early 2011 vs the same period in 2010. Even so, analyst Russ Crupnick says that “the physical video-disc market was a bit disappointing.” It shows that “Blu-ray may not be the replacement for DVD that many once hoped for.”  NPD played up the fact that 15% of all consumers used a Blu-ray player in the six month period, up from 9% last year. And 22% of all disc buyers bought at least one Blu-ray title. Are consumers warming to the format because of its sharp images and extra features? Crupnick says that’s part of the story: “The fact that prices are now within the budgetary range acceptable to rank-and-file consumers is helping to bolster the overall value proposition of the Blu-ray format,” he says. But 57% of adults still used a standard DVD player, same as in 2010.

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DVD Disaster? Study Says Sales Plummeted In 2010, Contrary To Industry Report

The bottom seems to have fallen out of the DVD market according to a startling report out this week from SNL Kagan. The research firm says that studio shipments of DVDs fell 43.8% to 226 million discs last year. Wholesale revenues fell about the same amount, 43.9%, to $4.47 billion. The study compared 415 titles released in 2010 to 352 in 2009. Helped by Avatar, Fox accounted for 13.6% of the 2010 wholesale revenues. That barely beat Warner, which had 13.5% of the market, closely followed by Disney with 13.4%. “Consumers are now opting to sign up for streaming and-or rental services such as Netflix,” analyst Wade Holden wrote. “They are using video-on-demand services more and more as they discover these services can be cost-effective.” His study did not look at sales of Blu-ray discs. It also doesn’t appear to square with the home video industry’s year-end data. DEG: The Digital Entertainment Group said that studios shipped “more than 1 billion DVD units” in 2010 as well as in 2009. DEG pegged total U.S. spending on DVD sales and rentals at $14 billion last year, down 11.4%. But with Blu-ray and digital, total home video spending was down 3.1% to $18.8%, it said.

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MGM Re-Ups DVD Deal With Fox Through 2016

Mike Fleming

One day after making a deal to co-finance the next two James Bond films and other feature films over the next five years, MGM chiefs Gary Barber and Roger Birnbaum solidified another piece of the reawakening studio’s puzzle by renewing its DVD deal with Fox through 2016. Here’s the official announcement:

LOS ANGELES, CA April 14, 2011 – MGM announced today that the company has renewed its worldwide Blu-ray Disc and DVD distribution pact with Twentieth Century Fox Home Entertainment through 2016. As part of the new agreement, Fox will now oversee electronic-sell-through for MGM titles and will continue to handle MGM’s vast and extensive movie and television library, as well as distribute several upcoming new release productions in the home entertainment market, including the next JAMES BOND film, set for global theatrical release on November 9, 2012.”

“Twentieth Century Fox is a valued partner that has taken great care of the MGM library for many years with the highest degree of integrity,” said Gary Barber and Roger Birnbaum, Co-Chairmen and Chief Executive Officers of MGM. “They are a tremendous asset to the studio as we look towards the future.”

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Netflix 2010 4th-Quarter Profit Jumps 52%

The online DVD and streaming rental provider which keeps announcing Big Media deal after deal also announced today that it now has 20 million subscribers and expects to have perhaps as many as 23 million by the end of 2011′s first quarter. But the real news is that Netflix blew past Wall Street’s forecasts with its 2010′s fourth-quarter profits jumping 52% with earnings of $47M (compared to $31M a year ago). Revenue rose 34% to $596M.

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‘Avatar’ Extended Collectors Set Unveiled

EXCLUSIVE: As if Twentieth Century Fox and James Cameron haven’t made enough money off this movie… It was always the director’s intention to create the “ultimate box set” that went deeper into the filmmaker process and the Avatar journey for fans. I understand he was very involved with every aspect of the development of this Avatar Extended Collector’s Edition, even coming to the lot with his producing partner Jon Landau a few weeks ago to thank the entire home entertainment team that worked on it. The Collector’s set includes the film’s 3 versions — the original theatrical release, the re-release, and the extended special that is 16 minutes longer than the original. “As Jim describes it, you pop the disc in and immediately see something new – as the movie with begins on Earth with Jake,” an insider tells me. The Avatar Extended Collector’s Edition will be available on Blu-ray Disc and DVD everywhere in the United States and Canada on November 16th. International release dates and product information may vary by market:

LOS ANGELES, CA. (October 5th, 2010) – Director James Cameron is unlocking the secrets of Pandora and taking fans on a guided tour of his vision with the highly anticipated release of AVATAR Extended Collector’s Edition on Blu-ray and DVD releasing November 16th in North America and rolling out internationally from November 15th. These exclusive Extended Collector’s Editions come with iconic,

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Blockbuster Bankruptcy Shows Danger of Being Inflexible In Digital Age

By | Thursday September 23, 2010 @ 8:18am PDT
Mike Fleming

Blockbuster made it official today, filing its long expected Chapter 11 bankruptcy, with a line of creditors that includes its product suppliers like Fox, Sony, Universal, Warner Bros and Disney. It seems unfathomable that given Blockbuster’s supremacy at one time–think of all the mom and pop video stores that went out of business when Blockbuster set up shop nearby–the corporation could not have been more forward thinking. It could have owned the VOD and rental by mail space dominated by Netflix, and it got its head handed to it by Coinstar’s Redbox, which offered the same DVDs in supermarket kiosks for 25% of the rental prices charged by Blockbuster. Its forays into those areas came too late because they were locked into the brick and mortar game plan. While Carl Icahn is reportedly buying up Blockbuster debt and somebody might take a shot at resurrecting Blockbuster and its $1 billion in assets, it might well be too late to establish itself in VOD and as a buyer of pay TV rights for films, as Netflix is now doing at a fraction of the costs incurred by Blockbuster to maintain its 3000 stores. It’s a cautionary tale about standing pat when the sand is shifting under your feet, and Blockbuster’s woes are similar to those being felt by brick and mortar bookstores like Borders and Barnes & Noble. They’re also hard pressed to compete with web rivals like Amazon, serving up both paper books and e-titles without having to pay rent, … Read More »

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Asia Pacific Is Fastest-Growing Market

By | Wednesday June 16, 2010 @ 4:03am PDT

DollarSigns.jpgSpending on movies and home entertainment in Asia Pacific will increase by 7.2% compounded annually to reach $29.3 billion by 2014. So says PricewaterhouseCoopers’ latest global entertainment and media outlook 2010-2014, published today. The pace of spending in Latin America will also outstrip the US, Canada and Europe. Latin American spending on film and TV will increase by 5.2% compound annually over the next 5 years, from $2.4 billion in 2009 to $3.1 billion in 2014, says the accounting giant.Europe, Middle East and Africa will be, however, the third fastest-growing territory. Filmed entertainment spending in Emea countries will increase by 4.2% annually from $24.3 billion to $29.8 billion by 2014. Western Europe will account for 90% of that spending. And the UK remains Western Europe’s largest market, being worth $7.2 billion by 2014 – a 5% growth rate.

North America will grow by 3.7% compounded annually to $45.3 billion in 2014 ($37.8 billion in 2009).

Worldwide global filmed entertainment spending will rise by 4.8% compounded annually, reaching $107.5 billion in 2014.

PwC produces its report each year for clients to buy. The full report covers advertising, internet, TV and music as well as filmed entertainment.

As for individual entertainment sectors, PwC says downloading movies to your TV or PC will be the fastest-growing. Digital downloads – including streaming and download-to-own — will grow by 37.3% between now and 2014, becoming a $2.1 billion global market. The North America digital download market will triple from $364 million … Read More »

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GAME CHANGER? Paramount & Redbox Enter Pact To Release Day And Date In The Sell-Through Market After 10-Month Test

By | Tuesday June 15, 2010 @ 1:25pm PDT

paramountlogoHOLLYWOOD, CA and OAKBROOK TERRACE, IL (June 15, 2010) -Paramount Home Entertainment Inc. (PHE) and Redbox Automated Retail, LLC (redbox), today announced that Paramount exercised its option to extend its revenue sharing license agreement, providing redbox access to PHE DVD and Blu-ray titles to rent at its approximately 22,000 kiosk locations on the same day they are released in the sell-through market. PHE exercised its option following results from a 10-month analysis of DVD sell-through and rental performance.

redbox“After analyzing the data from our test period we have concluded that redbox day-and-date rental activity has had minimal impact on our DVD sales,” said Dennis Maguire, Worldwide President of Paramount Home Entertainment. “By granting redbox day-and-date availability we are allowing the consumer a choice of how to consume our movies while maximizing the profitability of our releases in the home entertainment window. We are looking forward to continuing a productive and mutually beneficial relationship with redbox.”

“We are delighted to continue our relationship with Paramount to provide consumers with convenient, timely and affordable access to their favorite movies,” said Mitch Lowe, president, redbox. “We look forward to supporting Paramount movie releases through joint marketing programs. This arrangement is a win, win and win – for consumers, Paramount and redbox. ”

Redbox and PHE first signed a trial license agreement in August 2009, with redbox agreeing to provide PHE rental data to evaluate the potential benefits

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Overseas Video Spend Drops 4% Annually

By | Wednesday June 2, 2010 @ 8:55am PDT

avatar_dvdConsumer spending on Blu-ray and DVD is going to decline on average by 3.5% a year between over the next five years. So says London-based consultancy Screen Digest, which predicts the amount spent overseas on “packaged media” will drop to $14.5 billion by 2014, compared with $17.1 billion last year. If Screen Digest’s estimates are right, then Blu-ray and DVD sales will nosedive 22% internationally between 2007 and 2014.

The consultancy blames expensive Blu-ray players plus the worst recession in living memory for the format not taking off overseas the way it has done in the States.

Blu-ray will account for 35% of total international spending on physical video formats by 2014. By contrast, Blu-ray will represent over 68% of physical video purchasing in the USA that same year.

However, the States faces an even steeper decline in spending on DVDs and Blu-ray between 2007 and 2014 – a car crash of 35%.

Contrary to some reports, Avatar has done nothing to improve the prospects for Blu-ray outside of the US. In the States, 50% of those who bought Avatar in its first four days of release did so with Blu-ray. Outside of America, the percentage of Blu-ray sales for Avatar was about average. This was certainly the case in the UK, where a supermarket price war broke out. You could buy Avatar on DVD for as little as £8 ($11.40), barely half the £15 charged for Blu-ray.

Helen Davis Jayalath, video analyst, says: “The situation … Read More »

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UPDATE: NBC Plans Finale For ‘Heroes’?

By | Thursday May 13, 2010 @ 6:21pm PDT

heroes_nbc_tv_show_title_card_logo6:20 PM UPDATE: Now I hear NBC will decide on 3 possible futures for Heroes, perhaps as soon as tomorrow. The most unlikely is a 13-episode order for midseason. (Creator Tim Kring is hoping for this scenario, of course.) A real possibility is that NBC cancels it altogether. But I’m told odds are best that NBC announces ”some kind of climactic finale” for Heroes lasting 2- or even 4-episodes (back to back, over one- or two-nights) to air in midseason.

Even though Heroes‘ ratings are weak, it is a profitable show for NBC. It brings in the highest international sales of any of NBC’s primetime series. It’s the No. 1 most downloaded show overseas. Plus, it’s a huge DVD seller both domestic and internationally. “What it’s up against is that NBC’s new team is  trying to rebrand the network and give it a fresh look with new shows from J.J. Abrams, Jerry Bruckheimer, and David E Kelley,” an insider tells me. “Heroes doesn’t fit in with that. But Heroes is a big brand by itself.” If no decision is made tomorrow, then it’s possible NBC may wait to decide the show’s future after upfronts.

5 PM: I’m hearing that NBC might give Heroes a short order of 6 to just finish up the storyline of the series next fall. Or else it’s a goner. (My sources are betting on the latter.) In any case, there’s zero chance of a 22-episode pickup.

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19.7 Million ‘Avatar’ Blu-ray & DVDs Sold

By | Tuesday May 11, 2010 @ 3:27pm PDT

avatar_dvdJames Cameron’s Avatar retail sales (not including rental sales) have reached 19.7 million Blu-ray disc and DVDs combined worldwide by its third week in release, according to 20th Century Fox Home Entertainment. (By comparison, The Dark Knight sold approximately 16 million units worldwide on Blu-ray and DVD combined in its 3rd week.) Internationally, Avatar displaces Harry Potter 5 as the biggest selling title since the launch of DVD. Meanwhile, its Blu-ray disc sales are at 6.2 million – - more than double the industry standard for the high definition format. Avatar is now the biggest Blu-ray release of all time worldwide with no sign of slowing down.

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Lionsgate To Distribute Newmarket Titles

By | Tuesday May 11, 2010 @ 1:57pm PDT

lionsgate_logoSANTA MONICA, CA (May 11, 2010) – LIONSGATE and Exclusive Media Group’s Newmarket Films have announced that they have entered into a home entertainment distribution deal including DVD, Blu-ray, digital delivery, TV and Video On Demand (VOD). Under the terms of the arrangement, Lionsgate will become the exclusive Home Entertainment distributor for all Newmarket Films theatrical releases in the United States in addition to a large majority of Newmarket’s extensive library of high profile releases

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‘Avatar 2D’ Sets DVD/Blu-ray Sales Record

By | Sunday April 25, 2010 @ 11:30am PDT

2ND UPDATE, SUNDAY 11:15 AM: 20th Century Fox Home Entertainment today announced avatar_dvdthat James Cameron’s AVATAR 2D flew off shelves to become the fastest-selling Blu-ray of all time after just four days in U.S, and Canadian stores. Excluding rental sales, it sold 2.7 million Blu-ray units in North America, shredding Warner Bros’ The Dark Knight‘s Blu-ray sales record of 2.5 million units total. That means Avatar 2D in 4 days beat what Dark Knight did over 1 1/2 years. Retail sales of both AVATAR 2D’s Blu-ray and DVD discs have exceeded 6.7 million units since its launch last Thursday, on pace to be the best-elling title in recent history.

avatar dvd photo1UPDATED SATURDAY 4:55 PM: 20th Century Fox is saying that its First Day total AVATAR 2D U.S. and Canada sales of DVD and Blu-ray units were 3.2 million on Thursday. That breaks down to DVD 2M and Blu-ray 1.2M without rental sales. This easily beats the previous record set by The Dark Knight of 2.7 million (breaking down to DVD 2.1M, Blu-ray 600K). True, Summit Entertainment’s Twilight sequel New Moon sold 4 million units, but that figure is for First 2-Day sales. Avatar 2D‘s 2nd day numbers for Friday were close to 2 million, or a First 2-Day number of 5.2 million units. 20th Century Fox Home Entertainment flack James Finn is claiming to me Avatar 2D is now the #1 launch on both formats in the United States, France, and Germany. (Avatar Read More »

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Redbox Caves To Two Hollywood Holdouts

By | Thursday April 22, 2010 @ 2:54pm PDT

redboxI just got back in the office to find out yet another entity caved to Hollywood studio power and pressure. Frankly, I would have loved to see Redbox really stick it to the majors in its effort to make cheap DVDs available to consumers. Instead the company, like everybody else, buckled under to Big Media. So today Redbox has agreed to Universal and Fox demands for a 28-day window before making those studios’ DVDs and Blu-rays available for $1-a-day rentals at 20,000 kiosks in grocery stores and such. It’s a similar deal to the one reached recently with Warner Bros. So much for Redbox’s fighting spirit, evidenced when the company sued Universal Studios Home Entertainment and tangled with Twentieth Century Fox Home Entertainment as well. Maybe, one day, somebody won’t just bend over.

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Forecast: Online Movie Pot Of Gold Fading

By | Tuesday April 20, 2010 @ 12:44am PDT

Pot of GoldUh-oh. You know how online movies are always being held up as the pot of gold waiting at the end of the rainbow? How downloading movies, or streaming them over the internet, will more than make up for dwindling DVD revenue? Well, London-based consultancy Screen Digest has downgraded its digital film sales forecasts by one third.

The consultancy, whose forecasts all the Hollywood studios subscribe to, has slashed its digital film revenue estimate from $1.5 billion in 2014 to $943 million.

It seems we’re just not as keen to watch movies on PCs and on our Xboxes as Hollywood wants us to be.

Alarm bells rang when last year’s digital film sale revenue was off by 19%. Screen Digest had predicted $360 million in sales. The reality was $291 million. This is the first time that Screen Digest has restated its forecasts for the sector since 2006.

Senior analyst Arash Amel tells me that 2009’s results hide a more troubling figure. The drop off in interest in downloading movies to own is even steeper. The consultancy expected DTO to generate $250 million last year. Now it believes the industry struggled to pass $199 million. Amel says, “Download-to-own has always been seen as the pot of gold at the end of the rainbow, just out of reach. Well, that pot of gold is fading.”

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20th Century Fox Film Hoopla For 75th Bday

By | Wednesday April 14, 2010 @ 3:58pm PDT

This sounds like less of an artistic celebration — and more like crass commercialism:

20thCenturyFoxLos Angeles, CA April 14, 2010 – Today, Twentieth Century Fox Home Entertainment kicked off a 12-month marketing, promotions, publicity and media campaign to honor and promote the studio’s legacy and library. The celebration will include the release of more than 300 films on Blu-ray Disc and DVD.


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Is Bill Condon About To Sink Fangs Into ‘Twilight’ Saga’s Two Final Segments?

By | Wednesday April 7, 2010 @ 10:01am PDT
Mike Fleming

twilight-new-moonEXCLUSIVE: Bill Condon has emerged as the number one choice to direct the final two installments of The Twilight Saga: Breaking Dawn, I’m told. Summit Entertainment hasn’t signed him, but I’m told that after several strong meetings, they are negotiating. Condon was among a list of A-list directors approved by Summit and Twilight author Stephenie Meyer. That  list included Gus Van Sant, Sofia Coppola and Fernando Meirelles. Shooting will begin in the fall, and I heard the plan is to shoot two films back to back. That was just what my colleague Nikki Finke reported. She also wrote that Summit was looking for a big director and Dreamgirls and Gods and Monsters director Condon certainly fits that bill. Presumably, Condon would do this as his next project, and push back the picture he had planned to direct. Mann VillageThat’s an adaptation of Salmon Fishing in the Yemen, which he was putting together to be distributed by Fox Searchlight. Casting had been difficult on that one, as Colin Firth was in and out, along with Rachel Weisz and Kristin Scott Thomas. The Twilight job came open when The Twilight Saga: New Moon director Chris Weitz decided not to reprise, despite directing a film that grossed $707 million worldwide., almost doubling the Catherine Hardwicke-directed original’s $385 million worldwide gross. New Moon also broke Twilight’s opening weekend DVD sale record when it moved 4 … Read More »

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